Following the Hargreaves Report of 2011, Vince Cable confirmed that the government intended to enact a number of changes to the Copyright Designs and Patents Act 1988 (the “CDPA”), the introduction of a parody exception among them.

The proposed amendment to the CDPA carries out some of the changes suggested by a government report and three IPO studies. All four documents consider whether and how a parody exception might best be incorporated into the statute books. The extent to which the proposed amendment effectively implements their recommendations is examined below.

What?

The Enterprise and Regulatory Reform Bill is likely to be the mechanism to bring England and Wales into line with the jurisdictions examined under Study II and to incorporate the recommendations of the report and three studies. As it is currently phrased, the new section 30A will state that:

Fair dealing with a work for the purposes of caricature, parody or pastiche does not infringe any copyright in the work provided that:

(a) it is done in accordance with the rules of the genre;

(b) it is accompanied by sufficient acknowledgement; and

(c) the work has been made available to the public.

Report: Modernising Copyright: The report emphasises the need for copyright to be flexible, to support innovation, and to evolve with technology. It rejects the proposition that if a licence is available for the relevant use a parodist should be obliged to apply for a licence to avoid a finding of infringement. Parodists responding to the pre-report survey submitted that they found it difficult to monetise their work on the basis of the current system because of the reluctance of media outlets to risk infringement. Consumers also responded positively to the proposed parody exception, many citing the importance of freedom of expression.

A tension between the author/owner of the original work and the parodist is acknowledged by the report. On the one hand user generated parody was identified as a good potential source of revenue and a conduit for innovation. On the other, rights holders expressed concerns that licensing revenue would tumble, reproduction for parody would eat into the revenue of the music industry, and an already weak moral rights system would be compromised by allowing further carve outs from the author’s right to prevent derogatory treatment.

The report concludes that a parody exemption subject to the fair dealing restriction currently applied for the reporting of current events etc. would support the requisite balance of interests.

Study I: Evaluating the Impact of Parody on the Exploitation of Copyright Works: Bournemouth University was commissioned by the IPO to research the economic harm caused by publication of parody works on YouTube. The study establishes that there is no evidence that parodies harm rights holders’ interests; either by substituting parody for the original work in the marketplace, or as a result of reputational damage. The study further notes that parody generated £2 million in revenue for Google in 2011.

Study II: The Treatment of Parodies under Copyright Law in Seven Jurisdictions: This study analyses the features of seven different legal systems in relation to parody, a number of which have already enacted a form of parody protection. It considers the features of each system and comments on how effectively parody protection is implemented.

The study has the following observations to make:

  1. a requirement that parody is non-commercial would be overly demanding on parodists;
  2. an exemption for parodies targeting the work copied (“target” parodies) is more likely to be acceptable than an exemption that permits the copying of a work in order to target third parties (“weapon” parodies);
  3. any analysis of economic harm to the author/owner should be assessed at the same time as the value of the parody to its audience;
  4. the degree to which the parody is transformative and critical is relevant to an exception to the normal rights of the author/owner;
  5. the exception should acknowledge and evolve along with social custom; and
  6. it must not be a necessity for the original work or its author to be explicitly referenced, successful parody should achieve this implicitly.

Study III: Copyright and the Economic Effects of Parody: The team at Bournemouth University responsible for Study I (above) have made four further recommendations:

  1. in implementing a parody exception to copyright infringement, distinguishing between genres such as satire, burlesque etc. should be avoided;
  2. commercial parody should be allowed to fall within the ambit of the exception;
  3. if any economic test is introduced for the applicability of the exception, the focus should be on the degree to which the parody is a substitute for the original work in the marketplace and the degree to which parody provides an economic incentive for innovation; and
  4. the exception should be responsive to cultural and technological changes.

So What?

The proposed parody exception still leaves questions unanswered as to how it will operate in practice.

For law makers, it is obviously crucial that boundaries of any exception are clearly circumscribed and parody is hard to define. The jurisdictions examined in Study II have struggled to define what constitutes caricature, parody, or pastiche. The studies suggest that genres should not be defined at all. This is of little help in discerning the legislative boundaries of the exemption. The proposed amendment offers a half-way house between precision and flexibility by providing a non-exclusive list of protected categories. However, as of yet the ‘rules of the genre’ are a mystery.

The studies highlight the difficulty in setting out precise rules for when author/owner economic or moral interests should trump those of the parodist. These issues are unresolved by the Bill.

In terms of the economic rights of the owner, they suggest that only substitutive competition will be enough to result in ‘unfair dealing’. Studies I and III illustrate that economic damage through substitution is almost completely absent in the context of YouTube videos. Is it correct to say that under these circumstances, rights holders will have no recourse under the new exemption as a result of the lack of economic damage?

Moral rights are unamended by the proposed section 30A. They continue to be subject to written waiver by the author. In circumstances under which they are not waived, the courts will have to reach their own conclusions as to when parody will amount to derogatory treatment to the work in breach of section 80 CDPA. Case law considering the position moral rights in England and Wales is notoriously thin on the ground and this will likely remain the case.